Latest reports on labour unrest

China Labour Bulletin is quoted in the following articles. Copyright remains with the original publisher.

Time Magazine: As China Economy Grows, So Does Labor Unrest
New York Times: Workers at Chinese Honda Plant March in Protest
AFP: Dozens hurt in China labour unrest
Financial Times: Honda hit by new strike at Chinese supplier
SCMP: Hundreds clash as labour strife widens
Voice of America: Analysts: Salary Increases May Not Ease Southern China's Labor Woes
Global Post: Foxconn suicides: Why higher pay won't work


As China Economy Grows, So Does Labor Unrest

By Austin Ramzy
June 10, 2010

When the global financial crisis erupted in 2008, one oft-cited fear was that factory layoffs in China would lead to social unrest. That didn't happen, in part because Chinese workers proved willing to endure stagnant wages and unemployment as the national economy slowed. But now that Chinese growth has rebounded, workers aren't so patient.

In recent weeks, Honda has seen a series of strikes at its Chinese factories and suppliers. The Japanese automaker resolved a two-week work stoppage at a transmission plant in the southern city of Foshan on June 4 after offering a 24% pay increase. That was followed this week by workers walking off the line at an exhaust parts factory in Foshan that is partly owned by a Honda subsidiary. Employees have since returned to work at that plant, Foshan Fengfu, after an undisclosed agreement was reached, a Honda spokeswoman in Tokyo said. But another strike at a Honda joint venture that produces automobile locks in Zhongshan, Guangdong, is continuing. (See portraits of Chinese workers.)

The troubles aren't Honda's alone. In Kunshan, a city near Shanghai, 50 workers were injured on June 7 in a clash with security guards, the state-run China Daily reported, after 2,000 people went on strike at KOK Industrial, a Taiwanese-owned factory that produces rubber products.

While China's recent growth has been strong, especially when compared with the U.S., Japan and Europe, it faces the prospect of rising strife as workers demand higher wages and better working conditions. "You tend to see more labor unrest in economic boom times than economic downturns, which sounds strange," says Geoffrey Crothall of the China Labour Bulletin, a Hong Kong-based NGO. While workers may have been willing to give their bosses the benefit of the doubt during the 2009 downturn and accept low wages or pay cuts, now, says Crothall, times have changed. "The economy is booming again and the same workers are forced to work longer hours, but pay is same. Obviously they are angry and frustrated."

Foxconn, a Taiwanese company that manufactures electronics for Apple, Hewlett-Packard, Sony, Dell and others, announced a 30% increase in base wages on June 1 after a string of suicides this year at its Chinese factories. The company has 420,000 workers at its plants in the southern manufacturing center of Shenzhen, where nine workers have died after jumping from buildings this year and two more have injured themselves in suicide attempts. Another jumped to his death at a Foxconn factory in Hebei in January. On June 6 the company announced some workers in Shenzhen would see their base salaries rise this fall to 2,000 renminbi ($290), an increase of about 60% over the previously announced wage hike.

This year about 30 Chinese cities and provinces have increased or are expected to increase their minimum wages as coastal regions try to attract and retain workers. The wage hikes have been years in the making, says Ben Simpfendorfer, chief China economist for the Royal Bank of Scotland. "It's a resumption of a trend that first emerged in 2004," he says. "The economic crisis delayed it temporarily, but didn't eliminate it."

The recovery of both domestic and external demand has helped drive up salaries. At the same time, China's $586 billion stimulus package helped boost infrastructure development in interior provinces that have traditional lagged economically. That's kept some workers from traveling to coastal manufacturing regions for work. And while China has a huge labor pool, factories and construction sites favor workers in their 20s. That population will decline in the coming years, putting further pressure on wages. (See pictures of the making of modern China.)

In the short run, the wage increases will strain Chinese exporters who often subsist on narrow profit margins. But that should have benefits for the country's overall economy. "You're already seeing low-cost producers going out of business. That's a good thing," says Simpfendorfer. "This isn't a business [China] wants to be in." Rising wages will also ultimately help China increase domestic consumption, which the government says it wants to become a more important driver of economic growth.

At the same time the rest of the world will have to get used to higher prices on Chinese-made goods. For the time being there are few signs that China's trade partners have found a suitable substitute for cheap imports; meanwhile, the value of Chinese exports in May grew 48%. If you're working at a Chinese factory, that's another reason to ask for a little more cash.

Workers at Chinese Honda Plant March in Protest

By KEITH BRADSHER
June 10, 2010

ZHONGSHAN, China — Striking workers at a Honda auto parts plant here are demanding the right to form their own labor union, something officially forbidden in China, and held a protest march Friday morning.

Meanwhile, other scattered strikes have begun to ripple into Chinese provinces previously untouched by the labor unrest.

A near doubling of wages is the primary goal of the approximately 1,700 Honda workers on strike here in this southeastern China city, at the third Honda auto parts factory to face a work stoppage in the last two weeks.

A chanting but nonviolent crowd of workers gathered outside the factory gates on Friday morning and held a short protest march before dissolving into a large group of milling young workers who filled the two-lane road for more than a block outside the factory.

They were met by black-clad police with helmets, face masks and small round riot shields. But the workers showed no signs of being intimidated. The police marched off at midmorning, leaving the workers to block the road into the small industrial park next to a eucalyptus-lined muddy canal that runs past the factory.

The workers dispersed about an hour after the police left and remained on strike.

Management helped defuse the march by distributing a flier that essentially offered 50 renminbi, or about $7.30, for each of the eight days that the factory was closed beginning in late May as part of a nationwide shutdown of Honda manufacturing set off by a transmission factory strike. Management previously wanted to treat the shutdown as unpaid leave, workers said.

This latest strike, which started Wednesday morning, has taken on political dimensions.

The strikers here have developed a sophisticated, democratic organization, in effect electing shop stewards to represent them in collective bargaining with management. They are also demanding the right to form a trade union separate from the government-controlled national federation of trade unions, which has long focused on maintaining labor peace for foreign investors.

“The trade union is not representing our views; we want our own union that will represent us,” said a striking worker, who insisted on anonymity for fear of retaliation by government authorities or the company.

Geoffrey Crothall, the spokesman for China Labour Bulletin, a labor advocacy group based in Hong Kong that seeks independent labor unions and collective bargaining in mainland China, expressed surprise when told how the Honda workers here in Zhongshan had organized themselves. “It does reflect a new level of organization and sophistication” in Chinese labor relations, he said.

A Honda spokesman declined to comment on the details of the strike. The Chinese government has been relatively lenient in allowing coverage of the labor unrest because Honda is a Japanese company, and some anti-Japanese sentiment lingers in China as a legacy of World War II.

Despite unusual forbearance in allowing the various strikes so far, the Chinese government has shown no interest in tolerating unions with full legal independence from the national union.

Dozens of workers gathered in clumps shortly before sunset on Thursday in front of the sprawling parts factory and outspokenly criticized local authorities for seeming to side with the company.

The workers said that large numbers of police officers had been positioned in the factory on Wednesday and Thursday in an attempt to intimidate them. The two other Honda parts factories shut down by walkouts in recent weeks have reopened after workers were promised large pay increases.

The Chinese government has not allowed unions with full legal independence from the national, state-controlled union. But the government has occasionally finessed the issue by letting workers choose their factories’ representatives of the national union, or by allowing the creation of “employee welfare committees” in parallel with the official local units, said Mary E. Gallagher, a China labor specialist at the University of Michigan.

But these exceptions have tended to be in less prominent industries like shoe and garment manufacturing, and not in bastions of heavy industry like automaking.

Workers here were not specific Thursday about what would qualify as having their own union. They are mostly in their early 20s, more than half are women. Their education levels are low. Although several said they had high school degrees, Honda requires only junior high school educations.

The workers say they want to be paid as much as workers at the first Honda factory recently to go on strike, a high-tech transmission factory in Foshan where the workers are almost entirely young men with a couple of years of vocational school training in addition to high school degrees.

Besides the Honda strike here, there were new reports Thursday of strikes at Japanese- and Taiwanese-owned factories in at least five other cities. Four of the cities are outside the heavily industrial Guangdong Province, where all three Honda auto parts strikes have taken place.

But the strikes involving the other employers appeared to have ended quickly as managers, faced with an acute labor shortage, sought to address workers’ demands. Honda has settled the strikes at its other two factories as well.

Chinese-owned companies tend not to disclose when strikes have occurred, and it is not clear how many strikes over all have taken place in recent days.

The strike here has stopped work at a two-story factory that makes rear and side mirrors, door locks and a range of other auto parts for Honda assembly plants over the world. The workers here say that employees in each department of the factory held a meeting, discussed who would be their most persuasive representative and then selected that person to represent them on a factorywide council of about 20 workers that has held negotiations with management.

Municipal officials and representatives of the government-authorized labor union have also attended meetings of the workers’ council with management, workers said.

In a flier that workers said had been distributed to them by managers on Thursday morning, the factory’s management said it was beyond their authority to recognize a union. The management said that a government labor board would decide on the workers’ request by June 19, and asked that the workers return to their jobs in the meantime.

Dozens of workers from the factory gathered around a foreign reporter Thursday, even though clean-cut men in crisp shirts, perhaps plainclothes police officers or private security guards, were hovering nearby and sometimes filming.

The workers, who insisted on anonymity because of lingering concerns about retaliation, said that a company manager had announced over loudspeakers late Thursday afternoon that all workers would be asked on Friday morning to sign a new contract and would be dismissed if they failed to do so.

Asked if they would sign, the workers replied with a chorus of “no!”

Since going on strike on Wednesday morning, the workers have marched around inside the factory each day shouting slogans like “Increase our wages” before going home each evening to cramped apartments in nearby buildings.

The workers voiced skepticism that the company would meet their demands, mainly an 89 percent increase in their pay. It is currently 900 renminbi a month, or $132, for a 42-hour week. An 89 percent increase would be about 800 more renminbi a month, or a raise of about $117. Many workers in Guangdong province already earn considerably more than the minimum wage because of an acute labor shortage even before the strike started.

The minimum wage varies from city to city and changes frequently. It is currently 900 renminbi in Zhongshan, according to workers. Workers said that they had read news reports on the Internet that Honda had already granted raises of 500 renminbi a month, or $73, in settling other strikes. Honda has not confirmed the raises, indicating only that they were large in percentage terms.

Workers at the factory here said that their jobs required them to stand for eight hours a day at their posts, and that pregnant women were allowed to sit only in their last trimester. Workers also complained that they were not allowed to speak while working — a common requirement in Chinese factories — and that they had to obtain passes before going to the bathroom. They said they were criticized if managers thought they took too long getting a drink of water.

A municipal official standing with a group of private security guards outside the factory said that there was no evidence that Honda had broken any employment laws. The workers “just want more money, they’re inspired by the other Honda strikes,” said the official, who insisted on anonymity.

The strike began Wednesday morning after a woman employee showed up with her identity card improperly attached to her shirt and was denied entry by a security guard. The woman criticized the guard, who responded by shoving her to the ground, the workers said.

Workers said that the factory’s management had offered an increase of 100 renminbi a month in workers’ allowance for food and housing. The allowance is currently 300 renminbi a month, or $44.

Chen Xiaoduan in Shanghai contributed research.

Dozens hurt in China labour unrest

By Susan Stumme (AFP) – 9 June 2010

BEIJING — Dozens of striking workers have been hurt in clashes with police in China as a fresh labour stoppage again halted Honda's production Wednesday, in the latest unrest to rock the "workshop of the world".

The latest labour action, which came after a spate of suicides at Taiwanese high-tech firm Foxconn, again drew attention to what activists say are the difficult conditions and low pay faced by millions of Chinese factory workers.

The clashes on Monday at a Taiwan-funded rubber factory in the eastern province of Jiangsu marked the first time in recent days that disputes over salaries erupted in violence, with state media saying 50 workers were hurt.

Some 2,000 workers at the KOK Machinery factory in the city of Kunshan outside Shanghai walked off the assembly line, demanding better pay and an improved working environment, the China Daily reported.

The injuries occurred when security forces tried to prevent the workers from taking their strike into the streets, the report said.

Photos of the incident showed police and special security forces massed outside the gates of the facility, preventing workers from exiting.

The paper said 50 workers were injured, five of them seriously.

Officials at the factory refused to comment on the strike when contacted by AFP on Wednesday, but said that the workers had returned to work.

"The police beat us indiscriminately. They kicked and stomped on everybody, no matter whether they were male or female," one female worker told the South China Morning Post, which said at least 30 people were arrested.

Workers were asking for hardship pay to compensate them for working in high temperatures, full workers' insurance, housing subsidies and a change to make work on Saturdays voluntary, according to postings seen in Chinese chatrooms.

Some of those postings were later deleted.

"We have to work in temperatures of 40 to 50 degrees Celsius (104 to 122 degrees Fahrenheit). They refuse to do anything about the heat," one worker told the Hong Kong-based Post.

"The smell from the rubber is unbearable, but we don't even get a toxic fumes subsidy."

Geoff Crothall of the Hong Kong-based China Labour Bulletin linked the upsurge in labour strife to the general economic recovery, saying workers were less inclined to accept low pay, and facing long hours as orders picked up.

"We are finding in the last few years, particularly since the labour contract law in 2008, workers are more aware of their rights and more willing to stand up for their rights," Crothall told AFP.

"Workers just want to work somewhere that is not oppressive and is decent," he noted.

"I think labour activism in China comes in waves, but over the last few years, there's been an increase in the intensity and frequency of these waves."

Foxconn -- which counts Apple, Sony and Hewlett-Packard among its clients -- has agreed to a 67 percent pay hike for its hundreds of thousands of workers in China after 11 of them committed suicide, 10 in the southern city of Shenzhen.

Its parent company Hon Hai Precision Industry lost more than three billion US dollars in market value in two days this week as investors fretted over the pay increases.

Japan's number two automaker Honda Motor is reeling from more than a week of work stoppages in China -- first at its parts unit in Foshan, and then at an exhaust parts maker owned by a subsidiary -- that have disrupted production.

The first strike was resolved when Honda agreed to a 24 percent pay rise.

The second, at a joint venture factory in Foshan of Honda subsidiary Yutaka Giken and a Taiwanese firm, was ongoing Wednesday, forcing Honda to close two of its China assembly plants run by Guangqi Honda.

"There is no certainty as to when we can resume operations," a Honda spokeswoman in Tokyo told AFP.

Honda produces 650,000 vehicles a year in China.


Honda hit by new strike at Chinese supplier
By Tom Mitchell in Hong Kong and Jonathan Soble in Tokyo
June 8 2010

Honda has been forced to suspend production at another Chinese factory after a strike was called at a supplier in southern Guangdong province.

Some employees at Foshan Fengfu Autoparts downed tools on Monday, the Japanese company said.

Foshan Fengfu is 65 per cent held by Yutaka Giken, a Honda subsidiary that makes exhaust components for the carmaker’s factories in southern Guangdong province.

As a result of the strike, Honda said that it would stop production from Tuesday at Guangqi Honda Automobile, a factory it operates with its local venture partner Guangzhou Automobile.

The plant makes popular Honda models, including the Accord saloon, the Odyssey minivan and the Fit sub-compact.

Honda said it did not know how many of the factory’s 492 workers had gone on strike, or what their specific demands were.

But they appeared to have been inspired by a successful industrial action at another Honda facility in Foshan, a factory town in the Pearl river delta manufacturing region.

That action ended at the weekend, with the transmission factory’s 1,800 workers accepting a 24-33 per cent wage rise.

The strike forced Honda to suspend production in nearby Guangzhou, the provincial capital, and Wuhan in central China.

Honda said on Tuesday that the strike at Foshan Fengfu had not yet had any effects at its other China operations, but added that it was monitoring the situation closely.

Yutaka Giken declined to comment on the action.

Geoffrey Crothall, at the China Labour Bulletin, a Hong Kong-based worker rights group said: “We have seen waves of worker activism over the past decade, but the frequency and intensity of the waves are increasing,” .

In a report analysing worker activism in China in 2007-08, China Labour Bulletin noted that worker strikes often inspired copycat industrial actions at other nearby factories.

Meanwhile, in a separate industrial action, Merry Electronics of Taiwan confirmed that workers at one of its factories in Shenzhen, another south China manufacturing centre, had also launched a brief strike but returned to work after accepting a 10 per cent increase.

Workers’ increasing frustration with long hours and relatively low wages in the world’s workshop began to garner international attention in May after a series of suicides at a large Shenzhen facility operated by Foxconn, the Taiwanese contract electronics maker for corporate customers such as Apple, Dell and Hewlett-Packard.

The sheer size of Foxconn’s Shenzhen facility, which employs some 300,000 people, has made it difficult for workers there to organise themselves outside the auspices of China’s only officially sanctioned union, the All China Federation of Trade Unions, as they have done at the much smaller Honda factories.

Foxconn responded to the tragedies by promising to more than double workers’ pay, conditional upon successful completion of a three-month evaluation.

In spite of the unrest and wage increases, analysts said China would not lose its appeal as a manufacturing base.

Stephen King, group chief economist at HSBC, said:“Even if there are pockets of wage rises coming through, the relative [efficiencies of Chinese labour] are still very huge”.

Additional reporting by Nobuko Juji in Tokyo and Robin Kwong in Taipei

Hundreds clash as labour strife widens

Worker unrest spreads to Yangtze River Delta
Will Clem in Shanghai, Mimi Lau in Guangzhou and Choi Chi-yuk
June 9, 2010

Fresh worker unrest has broken out, this time in the affluent Yangtze River Delta, with hundreds of striking workers and police clashing outside a rubber factory near Shanghai on Monday morning.

Workers said dozens were injured or detained and they continued their sit-in yesterday.

Meanwhile, a strike at a Honda-affiliated plant in the Pearl River Delta city of Foshan looks set to continue for a third day. The strike, involving more than 250 of the 300 workers at the Foshan Fengfu Autoparts plant, attracted a heavy police presence.

The factory makes exhaust systems for Guangqi Honda Automobile. A spokesman for Honda Motor (China) said yesterday that all assembly lines at its plants in Huangpu and Zengcheng , which employ about 6,000 workers, would halt production today due to a lack of parts.

The recent incidents of labour unrest come against a broader backdrop of rising labour costs and growing worker agitation in the mainland's main manufacturing hubs. Electronics giant Foxconn has been forced to raise salaries after a rash of suicides in Shenzhen, and workers at a Honda Autoparts Manufacturing plant in Foshan won a pay rise on Friday after a two-week strike.

Geoffrey Crothall, a spokesman for the Hong Kong-based group China Labour Bulletin, said the clashes appeared to be part of a pattern.

"There has definitely been an upsurge in worker discontent and activism this year," he said. "It isn't just in southern China. We are seeing it in central provinces and now in the Yangtze River Delta. And it is not just the young - middle-aged workers are now beginning to say `enough is enough, give us our due'."

He said worker activism tended to come in waves. There was a big surge in 2008 but things went relatively quiet last year due to the economic downturn.

"As things begin to improve and orders are now starting to pick up again, workers are quite rightly wanting their fair share of the profits. As long as workers are being paid ridiculously low wages that can't even provide basic subsistence living costs, then they are going to start standing up for themselves."

Workers at the Taiwanese-owned KOK International plant in Kunshan , Jiangsu , accused the authorities of colluding with their employer and using violence to break up a protest over work conditions and pay.

"The police beat us indiscriminately," one young woman worker said. "They kicked and stomped on everybody, no matter whether they were male or female.

"I saw several riot police beating one worker who had fallen on the ground, then they dragged him away into their van."

Other workers said about 50 protesters had been injured in the confrontation, which lasted about an hour, and 30 to 40 had been arrested. One of those who had been hurt and taken away was said to be pregnant. They said between seven and 10 of their colleagues remained in police custody and were expected to be held for 15 days.

The clashes apparently took place when the protest spilled out onto the main road outside the factory. However, staff insisted they were "just standing at the gate".

The dispute - which workers said began on Friday with near-unanimous support - concerns conditions that employees say are unbearable, enforced unpaid overtime and low pay, the firm's alleged non-payment of social security and a lack of cover for work-related injuries.

"We have to work in temperatures of 40 to 50 degrees Celsius," one migrant worker from Yunnan said. "They refuse to do anything about the heat. The smell from the rubber is unbearable, but we don't even get a toxic fumes subsidy. If we get hurt at work they actually dock time out of our pay. Basic pay last month was supposed to be 960 yuan (HK$1,100), but I was only paid 903 yuan. How can we survive on this?"

KOK refused to allow a South China Morning Post reporter into the dusty white factory's rundown compound yesterday and turned down requests for an interview. About a dozen plain-clothes and uniformed police, plus security guards and some local government officials were stationed outside the gates.

On hearing of a media audience, striking staff crowded at windows, shouted and waved from the rooftop and crammed behind the plant's gate, calling out complaints. At one point two women workers sneaked out and tried to approach the Post reporter but they were pushed back inside by security guards.

Lu Quanyuan , a local government spokesman and director of the Huaqiao Economic Development Zone Personnel Bureau, said it was a "simple case of employer-staff conflict", which officials aimed to resolve at the earliest opportunity.

"The company demanded on June 3 that staff sign a new contract, backdated to February 1, and which was in breach of some of their labour rights," he said. "We immediately got involved to mediate to protect workers' basic rights."

He said the majority of issues had been resolved while a few minor points were still being negotiated.

Workers later said that nothing has been sorted out.

Lu was evasive when asked about arrests and declined to address the issue of whether anyone had been hurt. "I think the police, in order to maintain traffic safety, may have ... well, I didn't see it myself. I think they asked workers to go back inside."

Chen Weihua , who manages a firm in the same street, said he saw 100 to 200 workers blocking the main entrance after 10am on Monday, with about 20 black-clad riot police officers watching them closely. 

Analysts: Salary Increases May Not Ease Southern China's Labor Woes

Ivan Broadhead | Hong Kong
8 June 2010

After 10 worker suicides at Foxconn, the world's largest contract manufacturer of electronic products and China's biggest exporter, the company has nearly doubled salaries.  But labor experts in Hong Kong warn that may not be enough enough to heal the emotional strains faced by China's factory laborers.

Since economic reforms began 30 years ago, China's growth has been sustained by its blue-collar workers.

Nowhere is this more evident than the southern province of Guangdong, home to an estimated 30 million migrant factory laborers.

Foxconn, a unit of Taiwan's Hon Hai Precision Industry, employs more than 300,000 young men and women in the province, making electronic products for brands including Apple, HP and Sony.

The attempted suicides of at least 12 staff since January - resulting in 10 confirmed deaths - have focused attention on labor conditions at Foxconn, and China generally.  

Geoffrey Crothall of the China Labor Bulletin, a Hong Kong rights group, says rewards for workers are hard-earned. "They will work anything from eight to 12 hours a day doing the same repetitive task for very low wages.  The minimum wage is not a living wage in China.  To get a barely living wage, they have to do up to 60 hours overtime each month," he said.

Most Foxconn recruits are in their 20s and hail from the countryside.  Until the company's recent pay increases, most earned about $132 a month based on a a six-day week.

Staff receive free, albeit cramped, dormitory accommodation on the 600-acre campus.  Meals are subsidized too.  But Professor Paul Yip, the head of Hong Kong University's Center for Suicide Research and Prevention, says for many, the transition from rural to urban China is tough.

"Post- '80s, post-'90s babies: they enjoyed a pretty good life in the countryside based on the one-child policy.  But when they go to [work in] the city, it is very strict management.  That would not go down well among young people," he said.

Widespread media reports in southern China say Foxconn, like many factories, imposed tough efficiency and production standards on its workers, including silence at workstations. "There is no personal freedom.  As young people, you can imagine, they love to engage, to connect.  But if you are not allowed to communicate with one another for 12 hours every day?  Think what life that could be," he said.

Yip sees the problem in terms of shortcomings in care, although Foxconn managers have said that while sad, 10 suicides in a worker population of 300,000 is a small number.  

In response to mounting criticism, compounded by the company's attempt to make workers sign a contract not to kill themselves, Foxconn held a media tour of its facilities at the end of May.  The company has hired counselors to help staff with any psychological problems, and safety netting is being installed to catch anyone throwing themselves from the factory roofs.

Foxconn on Sunday announced its second pay raise in a week. Starting in October and subject to performance standards, basic salaries at the Longhua plant will rise to $293, more than double last month's take home.

A company statement said the rise was to reduce the need for staff to work overtime, and to facilitate rest.  Labor advocates such as Crothall say Foxconn salaries finally approach a fair living wage.  

Professor Yip supports any fairer wage mechanism.   But he says employers need to realize it takes compassion, not just money, to sustain a workforce's mental health.  "Do not think the employee is a robot that can continually do routine work for 12 hours.  Treat them with respect and then provide all the support and care they deserve.  Without doing this, I do not think growth is sustainable, and I do not think social harmony can be achieved," he said.

China now is censoring suicide-related news about Foxconn, so it may be difficult for labor activists and others to determine if higher salaries and access to counseling are effective in reducing deaths

Foxconn suicides: Why higher pay won't work
Analysis: China's growing labor problems run deeper than a few yuan.

Workers are seen inside a Foxconn factory in the township of Longhua in the southern Guangdong province May 26, 2010. (Bobby Yip/Reuters) 

BEIJING, China – With new reports of labor unrest emerging daily from Chinese factories, it seems increasingly likely that China’s place as a boundless source of low-wage labor to make the world’s consumer goods is changing.

What remains unknown is what the government and corporations will do to reform the system, beyond simply raising wages in factories where headline-grabbing unrest breaks out.

Taiwan’s Foxconn, a key supplier to Apple, Sony, Motorola and most other big tech companies, has agreed to raise basic salaries by 65 percent (to $293 a month) in its massive Shenzhen electronics plant where 10 employees have killed themselves this year.

Since the Foxconn situation drew an international spotlight to Chinese factory conditions, the focus has been on pay and the impact that higher wages might have on global manufacturing. The bigger picture goes beyond money. While factory pay has been a huge problem, labor experts say the entire system is riddled with troubling issues, many of them stemming from the lack of basic rights given the migrant workers who typically staff production lines, documented in last year's GlobalPost investigative series Silicon Sweatshops.

“Increasing salaries is an effective method to improve the workers material lives, but it is not enough,” said Dai Jianzhong, a labor relations expert at the Beijing Academy of Social Sciences.

Dai and others said wages are just one component of what’s needed in terms of labor reform in China. Other necessary measures would address living conditions and social welfare. Most migrant workers are ineligible for local health care and education, and living on-site at factory dorms means limited personal lives. Most groups say that democratically elected labor unions would go a long way in changing the system.

On the wage issue, labor-rights groups and scholars agree that Chinese factory workers are long overdue for significant pay raises. Factory pay has not kept pace with inflation over the past decade, helping in part to create an ongoing labor shortage in the Pearl River Delta.

Geoffrey Crothall of the Hong Kong-based China Labor Bulletin said wages “have been kept so low for so long that no one should be at all surprised that workers are demanding not just higher salaries but substantially higher salaries.”

Crothall was critical of Foxconn, saying that its sudden announcement indicates the company could have paid higher salaries earlier. Instead, the dramatic raise in salaries there will send a message to workers in other companies.

“Right now you have a lot of workers on very low wages, the economy is booming again, the boss is making money again but they are being forced to work even longer hours for no real increase in pay,” said Crothall. “So of course they are going to demand higher pay, and the only way they can do that is by strike action or other forms of protest that forces the local government to intercede in the dispute on their behalf.

“While this very often brings about the desired result — higher pay — it is clearly not an ideal situation,” he said.

Liu Kaiming, a former journalist who now runs an organization for migrant workers in Shenzhen, said raising salaries is far short of what workers need.

Basic increases in pay will help factory workers catch up in inflation, but won’t address underlying problems in the Chinese manufacturing model. Liu said in instances like Foxconn’s, companies need to change their management practices and listen to the concerns of workers. (See how one electronics company had success by listening to its employees). Liu said factories need to consider factors other than simply making goods for the lowest possible price to extract the highest profits.

“They should treat the workers as people, not money-making machines,” said Liu.

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